Posted 1/6/2024, 12:25:51 PM
L'Oreal's Strong Brands and Growth Drive Resilient Results, But Sky-High Valuation Presents Risks
- L'Oreal has strong brands, high margins, and growth potential in luxury beauty and wellness markets
- The company has achieved steady 9% revenue growth and has barriers to scale against competition
- Management is experienced, invested long-term, and family-owned with 34% stake providing stability
- Financials show resilient top-line growth of 12% in latest results, led by 28% growth in Dermatological Beauty
- Valuation is very high at 40x earnings with little room for outperformance, presenting risks of multiple contraction